Q+A-What is at stake in Nigeria’s Niger Delta?

ABUJA, Sept 11 (Codewit.com) – The success of Nigeria’s peace efforts in the oil-producing Niger Delta hangs in the balance, with key rebel leaders demanding the government address demands such as a military withdrawal before they surrender their arms.

President Umaru Yar’Adua has offered an unconditional pardon to militants who give up their weapons by Oct. 4, but the heads of three rebel factions say the offer is empty unless serious negotiations can be held with government. Following are some questions and answers on the consequences of Nigeria’s peace efforts. For a full story, please click on [ID:nLA84053].

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WHAT IS AT STAKE?

Nigeria’s central bank Governor Lamido Sanusi has warned that growth this year in sub-Saharan Africa’s second biggest economy hinges largely on a solution being found to the unrest in the Niger Delta. [ID:nL5273925] The violence, which includes kidnappings, pipeline bombings and oilfield raids, is costing $1 billion a month in lost oil revenues, the central bank said. Attacks on oil infrastructure by militants in the Niger Delta over the past three years have prevented the OPEC member from pumping much above two thirds of its 3 million barrels per day installed capacity. The insecurity has been a major deterrent to new investment. Hundreds of foreign workers have been kidnapped, prompting companies in sectors ranging from energy to telecoms and construction to withdraw non-essential staff.

Â WHY IS THE NIGER DELTA IMPORTANT FOR OIL MARKETS? Â Nigeria’s Niger Delta, a network of thousands of shallow creeks opening into the Gulf of Guinea, is the heartland of Africa’s biggest oil and gas industry. The region’s light crude oil is popular among U.S. and European refineries as it can be easily processed into fuel products. The United States, the world’s top energy consumer, has said it wants the Gulf of Guinea to supply a quarter of its crude oil imports by the middle of next decade. China depends on Africa for some 30 percent of its oil imports. Nigeria also holds the world’s seventh largest proven gas reserves and supplies 10 percent of global liquefied natural gas. Attacks on Nigeria’s oil and gas infrastructure last year helped lift oil prices to record highs near $150 a barrel. Â WHICH FOREIGN OIL COMPANIES OPERATE IN THE NIGER DELTA? U.S. oil majors Exxon Mobil <XOM.N> and Chevron <CVX.N>, Royal Dutch Shell <RDSa.L>, Italy’s Agip <ENI.MI>, and France’s Total <TOTF.PA> run major oil and gas operations with Nigeria’s state-run NNPC in the Niger Delta. Insecurity in the region has forced the companies to shut down around 800,000 barrels per day of crude oil production. [ID:nLB122853] Gas supplies have also been affected. Shell’s Soku gas plant has been shut down for nearly a year because of insecurity in the region. (Reporting by Randy Fabi; Editing by Nick Tattersall and Elizabeth Fullerton) (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/ )

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